Real Estate Focus

An interesting marketing ploy was run up the flagpole in the Sarasota real estate market recently.  A certain Joseph Long, from outside Florida- New Jersey actually, has offered to purchase a bunch of single-family residential inventory from local builders. He claims to have 60 of them lined up to unload 1,500 properties at a 30% discount. This represents approximately $700MM in acquisitions. Long claims his idea is falling into place (except for minor details like financing). But frankly this appears more like a cheap marketing stunt rather than a serious investment. We all are aware that there will be distressed properties out there. But timing is critical and jumping in too soon is suicidal.
 
It sounds good to purchase something at a 30% discount.  However in a falling market, when does a 30% discount become the market value?  It would make no sense for a financier or a savvy investor to step in to such a situation.  Which is why they have not and will not.  There is no shortage of money waiting to back the right deal. But no one with money is going to be reckless. So they won’t back a horse unfamiliar with the track and with limited ability to have any “skin in the game”.

Furthermore, those actually in a position to “pull the trigger” usually do not communicate the details of their intentions before the fact.  It negatively affects the negotiations.  And publicizing this before having the capacity to actually do it (no financing) indicates this is far more bluster than substance. The idea that somehow this will create sufficient buzz and spur the market by these pronouncements is folly at best.